Nigeria plans VAT increase in push to raise non-oil revenues
SEE ALSO :Oil prices fall amid demand worriesAhmed said the cabinet approved the proposed VAT rise when it met on Wednesday. “This is important because the federal government only retains 15 per cent of the VAT, 85 per cent is actually for the states and local government. The states need additional revenue to be able to meet the obligations of the minimum wage,” she said. Nigeria’s minimum wage was increased in April to 30,000 naira ($98) a month from 18,000. Prior to the minimum wage rise the government had argued that many of Nigeria’s 36 states struggled to pay salaries of state employees. The proposed VAT hike is part of a broader drive to increase tax revenues. Last week Nigeria’s tax chief told Reuters 5.32 trillion naira ($17.39 billion) was collected in taxes in 2018 and his office was targeting 8.9 trillion naira this year.
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